WingColors

I'll post here the same reply I posted on RightOn's blog, with a few minor modifications:

Actually, I sort of like the idea. Here’s why:

Suppose you give each child $5,000 at birth, put it in their social security account, and let the market have at it with secured investments. Suppose these investments grow, over the life of the child, at 6%. (Yes, I know real estate tends to grow at 3% on the average, accounting for hot markets, and that the stock market tends to grow at 11%, but 6% is a fairly good number, albeit a bit conservative). Accounting for inflation, here are the numbers :

Inflation @3% (which compounds annually)
$5000 is worth $8,574.25 in 18 years.
$5000 is worth $10,575.10 in 25 years.
$5000 is worth $35,058.02 in 65 years.
*Subtract the inflation amount from the appropriate totals.

Investment @6% (which tends to compound monthly in a market setting)
$5000 is worth $14,683.83 in 18 years.
$5000 is worth $22,324.85 in 25 years.
$5000 is worth $244,623.50 in 18 years.

And this is IF they don’t add ANYTHING with their paychecks. If they do, the numbers look a bit better:

Investment @6% (which tends to compound monthly in a market setting, plus a $100 monthly contribution)

$5000 is worth $53,419.15 in 18 years.*
$5000 is worth $91,624.25 in 25 years.*
$5000 is worth $1,203,117.50 in 18 years.*

*Note that for these, I’m presuming that the parents or someone is adding in $100 per month to the account from the time the baby is born to the time when the person starts taking over their own payments.

Now, I’m not a financial expert, but it looks to me as if something like this could very well work in setting up systems of government funded education to the collegiate level. (Yes, I know you abhor the idea of our government educating our children and would rather see a completely private system, but the fact is that publicly funded education has had a net positive effect on our country.) Even better, this money would likely be tax free (though I’m not so sure about the gains on the money). Presuming that the money is allowed to accrue tax free, then even paying a percentage upon collection will allow the person to take care of themselves in their olden years, if not used for defined, limited purposes, such as education, or a home. Indeed, this may be how we save a “public” system of social security: by allowing the market to help out, in a controlled fashion (we wouldn’t want a market crash when these people are 64 to wipe out their savings, would we?) And before they drew the money out, how about mandating fiscal responsibility classes?

Now, what about child mortality? If no money has been invested, then that money could be given back to the government to pay off debts. This, of course, COULD be tax free. Of course, depending on the child mortality rate, he compounded money may make its way to government coffers, which can either (a) serve as a way of reducing the deficit, or (b) be given to the family. Of course, I don’t like that second option because it might encourage infanticide. I don’t like the plan because it might encourage an increase in the child mortality rate — or at least a stop of decrease — in areas which need more money budgeted. But that’s just paranoid.

On a final note, the trillions in debt you talk about aren't because of social security, medicare, and medicaid. Yes, these programs cost money and they need to be retooled, no doubt about it. But need I remind you that were it not for this $500,000,000,000 war we’re in (that’s half a trillion dollars, by the way), and tax cuts so massive over the past years we’ve needed to borrow money FROM A COMMUNIST NATION WHO’S BEEN ACTIVELY SPYING ON US AND BUILDING UP THEIR MILITARY, and horrific pork barrel projects during years of Republican dominated government, we may still have that budget surplus Clinton and the Republican congress were able to put together during the 90’s? You know, the one that was supposed to clear the deficit by something like 2010?

I’m not a fan of Billary, but this does NOT seem at ALL like a bad idea.

(Note: The issue of "anchor babies" -- babies born in the US from non-citizen parents for the sole purpose of granting the kids citizenship -- was brought up, since it would add to the cost of the whole affair. Here was my reply: "...although, like you, I pretty much abhor the idea of “anchor babies.” A kid’s citizen status should be the same as his parents until the child is old enough to take this responsibility on their own.")

The less the government intrudes on the life of it's citizens the better.

Is this "$5,000 a kid" going to be prorated and applied to every citizen? Otherwise I think it's a tad unconstitutional. Also where's this *estimated* $20 billion a year going to come from? Taxes out the ass, that's where.

On a final note, the trillions in debt you talk about aren't because of social security, medicare, and medicaid. Yes, these programs cost money and they need to be retooled, no doubt about it. But need I remind you that were it not for this $500,000,000,000 war we’re in (that’s half a trillion dollars, by the way)

I have to disagree with you there. Health care and social security are the largest fiscal challenges in the future. 40 years ago, 43% of the federal budget was for defense and only 1% was for Medicare and Medicaid. Last year, 20% was for defense and 19% was for Medicare and Medicaid. That's not even including social security! People thing that global terrorism (Iraq war) is the main problem right now. But last year we spent $100 billion on Iraq, which doesn't help, but our operating cash deficit was $430 billion. So we could get out of Iraq today and we'd still be in bad shape. (I should point out that I'm not a fan of the war or the current foreign policy, but that I still don't believe people should use the war as an argument for the current budget situation)

We haven't even hit the Tsunami of spending, which is going to start next year when the Baby Boomers start to retire. In the last six years alone, the difference between what we promised to pay retirees and the amount of cash on hand increased from $20 to $50 TRILLION dollars. That's a "health care mortgage" of $440k per American household with no house to show for it.

Sure, the war is expensive, and doesn't help. But the root of the problem lies much deeper and will take a lot more effort, sacrifice, and strong leadership to fix.

That's retarded. People are responsible for themselves. The government is not mommy and daddy.

Back in the day, public schools with parental consent, had each student bring into the teacher a parental agreed amount per week and that went into a savings account. The privacy issues were none as the student gave the sealed envelop directly to the teacher. I remember I brought in only 50 cents. It was a big part of the public schools encouraging and teaching saving. The math curriculum was all about how much interest the savings would elicit. Like many ideas and fads, this whole idea was only for two years and then attention switched elsewhere.

I don't want the government to force or require anyone to open a savings account. That should be our own choice, with the money we earn.

Food, clothing and shelter are primary in the budget, and some can't afford to save, beyond those life sustaining expenses.

I don't want the government to force me to save. I should be able to chose when/why/where I save if I do so at all. The government does not have the right to make decisions for us. It's my money and I'll do with it what I want.

Instead of worrying about a replacement for social security we should just eliminate forced government savings alltogether. That includes no universal health care or anything else which takes money out of my pockets without my consent.

If people aren't saving they usually have a reason; if they don't that's there problem - not mine. If I feel like putting my money into different investments that's my choice - not the government's.

The reason is often in this country that we are not educated about simple finances, we are taught to spend from a very young age. It's all about having things. I support mandatory classes on finance and simple economics as it relates to every day life starting as early as possible.

I read this earlier:

WASHINGTON (Reuters) - With the U.S. government fast approaching its current $8.965 trillion credit limit, the Senate on Thursday gave final congressional approval of an $850 billion increase in U.S. borrowing authority.

The Senate voted 53-42 to raise the debt ceiling to $9.815 trillion ...

From Reuters.

Can somebody explain that? Is the US government almost $9trillion in debt or does that count all borrowed money from US citizens? Either way, isn't that a metric bitchload of minus-money to have?

We live in a world where companies are more than happy to lend, lend and lend some more and people have staggering amounts of their own personal debt... And while I agree that this particular plan is a little misguided, they definitely should be doing something to encourage saving and the removal of all that debt.

No it's money plus interest the US governement owes to anyone including "we the people".

So currency (virtual, paper and coin) in circulation?

Humm, that question is beyond me. I believe the debt owed at least that 9 trillion is due directly from our taxes, there are other funds which cover social security etc and those are solvent or I think the word is liquid, so the debt owed is money borrowed from the first fund the one from our taxes and I believe funded by bonds or such which is what make them debts so not in circulation I don't believe ,as bonds are just paper debt the governement owes to whoever holds them.
I'm sure someone will pop up here any second with the real answer.

I don't think the government should force parents to save more for a better future, but maybe there should be some regulations on the banks giving out these loans, credit cards, and such to people that they know can't pay it off!

I don't think the government should force parents to save more for a better future, but maybe there should be some regulations on the banks giving out these loans, credit cards, and such to people that they know can't pay it off!

So it's not the fault of the people taking out loans and cards they can't pay off..it's the fault of the banks for giving them loans and cards?

I lament the passing of personal responsibility.

It even gets worse!

The rise in the borrowing ceiling will approach $11.231 trillion in fiscal 2012!

Oh, and from the department of the treasury:

The term national debt refers to direct liabilities of the United States Government. There are several different concepts of debt that are at various times used to refer to the national debt:

* Public debt is defined as public debt securities issued by the U.S. Treasury. U. S. Treasury securities primarily consist of marketable Treasury securities (i.e., bills, notes and bonds), savings bonds and special securities issued to state and local governments (State and Local Government Series securities, or SLGS). A portion is debt held by the public and a portion is debt held by government accounts.
* Debt held by the public excludes the portion of the debt that is held by government accounts.
* Gross federal debt is made up of public debt securities and a small amount of securities issued by government agencies.

Clinton can kiss my ass, and frankly, all candidates who are continuing to support growth and control of government can do so and then go shoot themselves in the forehead, courtesy of our second amendment.

When I have children, I will likely begin planning far ahead for them, but not with some pissy little savings account that gets terrible interest. It's not the government's business, it's not their money, and it sure as hell would not be their child.

Even playing in the stock market is better than some government idea, because you can just bet the interest rate would be a pretty well dead one. Meanwhile, I'll just take a swing here, and also guess you'd not be allowed to take that $5,000 out of the account, considering it'd be a government scheme.

At the end of the day, people need to be responsible for themselves. Parents need to be responsible and think ahead, yes, but if your parents don't, that's not the end of the line for you, either. Far from it.

The problem here is that everyone is always crying that they want to be free, but very few want to be free enough to choose and rule themselves, because taking responsibility can be H-A-R-D. Boofuckinghoo.

Apologies for the anger here. It's just that I am so sick of inept government/politicians trying to tell us they know what's best. They don't, as proven by history itself.